The project to expand the State Correctional Institute at Graterford due to overcrowding has been canceled. Currently, the prison houses 2,100 inmates, but it is so crowded that prisoners are being shipped to Michigan and Virginia. The project was originally slated to add 4,000 beds to the prison, 3,000 of which would have replaced existing beds. State officials had hoped to break ground this fall on the project site.
On August 31, 2010, Pennsylvania Commonwealth Court Judge Dan Pellegrini ruled in favor of a group of contractors who filed suit against the Pennsylvania Department of General Services (DGS) and the Pennsylvania Department of Corrections for violations of the Commonwealth’s procurement laws. The Graterford Prison Project Case effectively halted the bidding process on the $365 million construction project to expand the prison.
The case centered around 3 issues:
- Whether DGS could limit the bidding to 3 bidders
- Whether DGS should have posted bidders’ technical details on the internet
- Whether the state must obtain separate bids for heating and air conditioning, plumbing and electrical work
In his opinion, Judge Pellegrini concluded that:
[B]udgetary concerns or expediency do not give the Department the right to ignore a legislative mandate. . . While granting a preliminary injunction may result in prisoners staying out of state a little longer (albeit, at no additional net cost to the Commonwealth), it will harm the public more if we allow the Department to willfully violate the law.
The attorney representing the contractors stated that they were only interested in making sure that DGS was following state law. Immediately after the ruling, Ed Myslewicz, a spokesperson for DGS, voiced the agency’s disappointment in the outcome, “[o]bviously, we are disappointed by the opinion, because it affects a tremendous amount of construction activity.” At that point in time, Myslewicz stated that DGS attorneys were reviewing the opinion but that no decision had been made regarding whether or not to appeal it.
On September 27, 2010, DGS issued Bulletin No. 10 cancelling bids for the project as currently issued, “in the best interests of the Commonwealth,” indicating its plan to take “immediate action to revise and re-issue the Request for Proposal for a Design Build Contractor for SCI Graterford East and SCI Graterford West.” As a result, companies interested in bidding on the project or those that have already prepared a bid, should not consider their efforts wasted, as a new round of bidding is approaching.
In addition to the lawsuit relating to the DGS bidding, a lawsuit is pending before the Pennsylvania Supreme Court over whether or not DGS can utilize a project labor agreement (PLA) on the project. The lawsuit is an appeal of the December 2009 decision of the Commonwealth Court in which Judge Pellegrini ruled that the PLA was appropriate for the project because it was critical that the project deadline be met “without disruption or stoppage.” In response to the recent bid cancellation, DGS filed a Motion with the Supreme Court claiming that the appeal was now moot since there is no bid. Counsel for the non-union contractors, who are seeking a determination that a PLA should not be utilized at the project, plans to move forward with the appeal because it is anticipating that DGS will reissue the project for bid with a PLA.
Cohen Seglias will continue to monitor and report on the issues surrounding these cases as they emerge.